The world is changing as new technologies rip through old economies. The prospect of life outside the European Union will alter how we trade, move goods and people around and make our way in the world. For a long time these questions about the future have been neglected by national governments – left to the market, to globalisation, to Brussels. Now we need active change.

To provide it, the government is launching its industrial strategy white paper, which will be published next Monday and heavily trailed during this week’s budget. In a welcome move, Theresa May has already outlined how the government plans to increase public and private R&D investment by up to £80bn over the next 10 years. The prime minister also announced £1.7bn to improve transport links within city regions.

We need to rethink research funding for UK regions to prosper

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This comes as the UK is in serious need of new thinking to address fundamental long-term economic challenges: poor productivity, unbalanced regional growth and a weak track record in translating knowledge creation into inclusive wealth creation.

The impact of the financial collapse in 2008 and the recent decision to leave the EU have only exacerbated these deep-seated national problems. A long-term industrial strategy for the UK that includes proper investment in R&D and connectivity is overdue.

For the industrial strategy to make the most difference to people’s lives, it needs to take a comprehensive, regional approach. Simply investing in potentially successful industrial sectors – such as digital, advanced manufacturing and health technologies – will embed inequalities and fail to deliver inclusive growth.

We need this because performance of the overall UK economy is held back by stark variations in productivity. London and south-east perform well above the national average, on a par with the most successful parts of Europe, while productivity everywhere else lags well behind. Sheffield and other former industrial powerhouses are among the least productive in the UK.

This is partly down to a long-term failure to address industrial decline, which many areas outside the south-east faced in the 1970s and 1980s. Tax revenues from a supercharged financial sector in the City of London have fuelled public spending. Governments were able to ignore regional inequality – until Brexit.

We need something now that goes beyond the old-fashioned, post-war regional strategies. It should explore what is really driving growth in cities and regions – including universities. It should reflect the fact that the success of our knowledge economy depends on closing the gaps between innovation and implementation.

Let's draw blue skies research out of our universities and into the economy | Ruth McKernan

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As an example, my own university, Sheffield Hallam, contributes half a billion pounds to its regional economy, working with more than 2,000 employers every year through research, innovation and graduate recruitment. We are investing £14m in building the Advanced Wellbeing Research Centre to deliver health innovation. It brings together academics, industry and the medical profession to create the most advanced research and development centre for physical activity in the world – and attracts jobs and investment. The centre will also generate health benefits for the entire population by helping people exercise more effectively.

This is not exceptional: it’s what engaged universities do. With more targeted government support through the industrial strategy, we could achieve even more to help redress the productivity imbalance within our region.

The changing world calls for imaginative responses that drive innovation, using research into real world problems to stimulate new developments that have a real impact. We know universities can drive prosperity, building successful economies based around teaching and research. The next step is to build on their potential to foster inclusive growth.

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